Sanford Health to merge with Good Samaritan

Sanford Health agreed to merge with Good Samaritan Society, mirroring other health systems that have made a play for long-term care providers to try to better coordinate care once patients leave the hospital.

Sanford, which has 44 hospitals, nearly 1,400 physicians and 28,000 employees, wants to add Good Samaritan and its 200-plus post-acute, skilled-nursing, hospice, assisted-living, rehabilitation and home-health facilities to its network, along with its 19,000 employees in 24 states. Good Samaritan board members approved the merger agreement Tuesday, which would combine the two not-for-profit Sioux Falls, S.D.-based institutions.

"This forward-thinking plan will become a national model to serve communities with exceptional care and value through the full spectrum of one's life," Kelby Krabbenhoft, president and CEO of Sanford, said in prepared remarks.

There has been significant consolidation among post-acute providers as large organizations look to capitalize on growing demand for those services. The aging population coupled with payers' and consumers' push to provide care at home has attracted both horizontal and vertical alignment.

Many smaller independent post-acute providers have struggled given their heavy reliance on government payers and the challenges involved in recruiting and retaining employees.

"The big health systems are thinking through how to incorporate home health into their strategy," said Lawrence Kraska, president and CEO of home health provider Interim HealthCare. "The home care piece of the model is becoming a key part of their strategy."

The Sanford-Good Samaritan deal is expected to close by Jan. 1, after customary regulatory reviews.